Block Acquires Intel's Bitcoin Mining Chips to Accelerate Entry into Mining Hardware Market

Jack Dorsey's fintech-payments company, Block, recently purchased a significant quantity of Bitcoin (BTC) mining chips from Intel, just as the chipmaker plans to wind down its production. This acquisition will accelerate Block's plans to enter the mining hardware market and help it bring mining machines to market while focusing on the development of its cutting-edge 3-nanometer chips.

Intel announced in February that it would discontinue its Bitcoin mining application-specific integrated circuits (ASIC) production in April 2024. Block seized the opportunity to acquire a large number of these ASICs from Intel, as mentioned in a Friday blog post. The company had initially planned to finalize its design of a 5-nanometer chip for Bitcoin mining this quarter and build machines based on that. However, the recent purchase allows the team to concentrate solely on the 3-nanometer design.

Nanometers in chip design refer to the size of each transistor. Millions of these transistors are packed together to create a chip. Smaller transistors mean more can fit on a chip, enabling it to run more calculations and resulting in a more powerful chip.

Thomas Templeton, Block's hardware lead, told CoinDesk that the company's first-party products would be available in early 2024. The quantity of chips purchased is sufficient to bridge the time until Block can design and produce its own 3-nanometer chips.

Block's primary goal is to enhance the decentralization of the Bitcoin network. Templeton stated that the main issue in mining is the diversity of manufacturing and supply chain. Block aims to provide more tools for more people to build and use, with ASICs at the core of mining.

Currently, the mining manufacturing industry is dominated by two players: Bitmain and MicroBT. In March, Block announced its work on a mining development kit, which will enable other engineers to create products using Block's chips. This kit is expected to provide developers with a suite of tools to unlock innovation in Bitcoin mining hardware. Block intends to open-source this technology and encourages the community to contribute to its development.